Inner-City Hospitals Bankrupted By Addition of Illegal Immig

[BillV]

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This relates to the Sixth Question of my Proposed Topic - Why should so much be spent on social services for illegal immigrants (emergency-room medical care, school for their children, etc.), when we refuse to spend adequately for our permanent American underclass (African Americans and Native Americans) who are displaced in the job market by the illegal immigrants?

This is a front-page article in the NY Times on Tuesday (Jan 8th) describing how inner-city hospitals which, like inner-city schools that we studied on Nov 8th, are being bankrupted because they rely on local governments and their property taxes to make up operating deficits. And how the problem is exacerbated by such hospitals having to serve both the permanent American underclass (African Americans and Native Americans) – and the illegal immigrants who displace them in the job market.

Editorial Note - This article was described at the Jan 10th meeting and, as requested, is being posted ex post facto.


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NY Times – Front-Page Article Published 8 Jan 2008

A Safety-Net Hospital Falls Into Financial Crisis
By SHAILA DEWAN and KEVIN SACK

Like tens of thousands of Atlantans over the last 115 years — like Gladys Knight, the soul singer, and Vernon Jordan Jr., the presidential confidante; like more than one in three babies born here in the last decade — Ms. Vaughn entered the world at Grady Memorial Hospital, one of the nation’s largest safety-net hospitals.

Ms. Vaughn was not only born at Grady, she also works there, as a senior nurse in the diabetes clinic, where many of her patients are Grady babies, too. And now, like thousands of other Atlantans, she is hoping to save the teeming charity hospital that has provided her with both life and livelihood.

To generations of Georgians, this city is unimaginable without Grady. Yet that has been the prospect facing the region for the last year, the result of a multimillion-dollar shortfall in the cost of providing charity and emergency care that no one — not the counties, the state nor the federal government — has been willing to cover, though Grady provides vital services to the entire region.

Once admired for its skill in treating a population afflicted by both social and physical ills, Grady, a teaching hospital, now faces the prospect of losing its accreditation. Only short-term financial transfusions have kept it from closing its doors, as Martin Luther King Jr.-Harbor Hospital in Los Angeles County did last year. That scenario would flood the region’s other hospitals with uninsured patients and eliminate the training ground for one of every four Georgia doctors.

Ms. Vaughn feels the strain when she has to counsel 20 patients in a day, twice as many as she did only five years ago. Or when she has to tell diabetics at risk of blindness that it might take four months to get an eye appointment. “It makes me sad,” she says, “that I’m a Grady baby and we have to go through all of this.”

Although the hospital is unique in many ways, the code red at Grady is emblematic of the crippling effect America’s health care crisis has had on public hospitals around the nation. Though Grady is among the most distressed of the country’s 1,300 public hospitals, others have faced similar challenges in recent years, including those in Miami, Memphis and Chicago, said Larry S. Gage, president of the National Association of Public Hospitals and Health Systems. There are 300 fewer public hospitals today than 15 years ago, with hospitals having closed in Los Angeles, Washington, St. Louis and Milwaukee, Mr. Gage said.

Dr. Carlos Del Rio, Grady’s chief of medicine, calls the hospital “the canary in the coal mine.”

Like other public hospitals, Grady is operating on a business model that is no longer sustainable. A third of the hospital’s patients, including those treated as outpatients, are uninsured, among them a rapidly growing group of immigrants. Another third are covered by Medicaid, which reimburses at rates well below Grady’s actual costs. Many hospitals use their privately insured patients to subsidize indigent care, but at Grady, only 8 percent of inpatients fit the privately insured category.

In large part, that is because in Atlanta, as in most other cities, better-financed private and nonprofit hospitals are able to market their services and high-tech equipment to patients with good insurance coverage, including those on Medicare, leaving Grady with little but those it was intended to help: the under-insured and those without insurance at all. The National Association of Public Hospitals says its members account for 2 percent of all hospitals, but provide 25 percent of the nation’s uncompensated care.

Over the years, the cost of caring for the uninsured and underinsured has grown while taxpayer support has stagnated. Suburban counties have declined to pay a share of those costs, though their residents regularly wind up in Grady’s emergency room and its highly regarded centers for burn and poison treatment. Management problems within the hospital have played a role, and community pressure has kept Grady’s politically appointed board from making deep cuts. As a result, the hospital has faced deficits for 10 of the last 11 years.

It can no longer do so. This fiscal year’s budget gap is projected to hit $53 million. Emory University and Morehouse School of Medicine, whose medical schools supply the hospital’s doctors and are its biggest creditors, are owed an accumulated $71 million and have threatened to bolt.

Grady officials estimate it would take $366 million to meet long-ignored capital needs, like replacing quarter-century-old beds, antiquated computers, and the trauma ward X-ray machine, which conked out two years ago. Department chiefs predict a growing difficulty in recruiting physicians and residents.

And despite the efforts of the hospital’s passionately committed staff, patient care is clearly suffering. There are interminable waits for appointments, some services have been discontinued and the hospital ranks below average on safety measures like preventing bed sores, infections, and even death in low-risk procedures. One study, for example, ranks Grady nearly dead last in the nation in following standards for treating pneumonia.

The hospital, sandwiched between downtown and the neighborhood where Martin Luther King Jr. was born, was the place where victims of the 1996 Olympics bombings and countless other disasters have been treated. It is so intrinsic to the city’s identity that Maynard H. Jackson Jr., the first black mayor, liked to say that Grady babies should be allowed to vote twice.

But Grady’s value is more than sentimental — it is essential to the region’s health. With 675 beds and 16 operating rooms, the hospital handles more than 850,000 outpatient visits a year and admits more than 30,000 inpatients. It is home to the only Level 1 trauma center in north Georgia and the city’s only emergency ambulance fleet. It has one of the country’s largest AIDS clinics, a dialysis unit and a 24-hour emergency center for sickle cell anemia.

All are now at risk.

The prospects that Grady could close, and that Atlanta’s health infrastructure could crumble, have forced a civic re-examination of the region’s commitment to its least fortunate, a reckoning that has revived old antagonisms over race, power and class.

Virtually every aspect of Grady’s operations has come under scrutiny: its nine neighborhood clinics, its subsidized pharmacy, its care for Atlanta’s growing population of illegal immigrants, even its 60-year-old governance structure. Some have suggested that Grady must compete for paying customers in Atlanta’s fierce medical marketplace, while others say that taxpayers should contribute more to continue its mission. Will Grady outsource, or simply downsize? And if it must downsize, which patients should be turned away?


“Grady is that last resort,” said Sandra Crayton, managing director of Alvarez & Marsal Health Care Industry Group, one in a long line of consulting firms hired to help the hospital bail itself out. “The board has a very difficult, and in some cases nearly impossible, balancing act. It’s sort of like Solomon and the baby. What are you going to do?”


A Patchwork of Care

The patient in Trauma 3 was a Grady baby, though no one could have guessed it when the ambulance pulled in at 1 a.m. that Saturday.

He beat considerable odds by being white, and from suburban Cobb County, where most folks give Grady little thought until they need a surgeon in the middle of the night.

The bearded, middle-aged man was bleeding from a self-inflicted gunshot wound to the left side of his chest. “Don’t let me go out in pain,” he moaned in a drawl to the doctors and nurses treating his injury. “I was born at this hospital.”

Grady’s chief of emergency medicine, Dr. Leon L. Haley Jr., smiled slightly: “Well, tonight, he’s not going to die at this hospital.” And so the creaky but miraculously effective patchwork of an emergency room jolted into action.

The ER did not have a working X-ray machine that night, so doctors had to roll in a portable one to locate the bullet. The X-rays were produced on film rather than digitally, causing a 10-minute delay in diagnosis. There were gurneys without wheels, and a computer system so outdated that doctors had to call up four separate programs to compile records on a single patient.

But six days later, the patient was discharged in good condition.

“We’ve gotten really good at MacGyvering,” said Dr. Philip H. Shayne, an emergency room physician. “We use paper clips for a lot of stuff.”

That may no longer be good enough. On any given day, a patient taken to Grady’s storied emergency room, or to any other unit in the hospital, may still receive care as good as any in the city. But the signs of stress are everywhere, in overworked staff, in broken equipment, in outmoded systems.

Last month, the Joint Commission, the country’s leading health care accrediting agency, raised serious concerns about Grady’s status after observing numerous significant shortcomings during a five-day inspection. Although the commission has not yet released a public report, hospital officials, speaking anonymously, said the commission’s concerns included broken equipment, sanitation and the adequacy of staff supervision.

Those foreboding findings came only two years after the federal government threatened to deny Grady Medicaid payments because the hospital sometimes waited nearly two years to conduct reviews of patient deaths. That problem has been resolved, hospital officials say.

But an analysis of hospital standards by Ashish Jha, a professor at the Harvard School of Public Health, ranked Grady in the lowest fifth of all hospitals in the treatment of heart attacks in 2006, the lowest tenth for heart failure and in the lowest 1 percent for pneumonia. The hospital also lagged when compared with its inner-city peers.

Other quality indexes, including one compiled by the Georgia Hospital Association, rank Grady well below the state averages for all hospitals and for those of similar size.

The hospital’s burden is most visible in the emergency room, where the hallways that recent night, as most nights, were chockablock with stretchers — one man, shackled to his gurney, writhing through an acid trip; a woman fighting seizures; asthma patients sucking down oxygen. Their comings and goings — more than 300 a day — are tracked in doctors’ script on a greaseboard, a relic rarely seen in an age of big electronic screens. Because of crowding, it can take 24 hours to move a patient to intensive care, Dr. Haley said.

Elsewhere in the hospital, there are long waits in the pharmacy. The equipment for cardiac catheterization and magnetic resonance imaging breaks with regularity. Because Grady often cannot pay suppliers on time, there have been temporary shortages of essentials like neck braces, electrodes and even saline.

A third of the ambulances need to be put out of their misery, said Astria L. Benton, a paramedic supervisor. Every week or so, a vehicle simply gives out while in transit, and Ms. Benton prays that the patient will not die before she can orchestrate a rescue.

“No one wants to talk about it,” she said, “but it could happen.”

The orthopedic department has a waiting list for elective procedures that one doctor quantified as “infinity.” Its doctors intermittently instruct other departments to not send them patients. That has been a particular problem for certain AIDS patients, who find themselves in wheelchairs because they cannot get needed hip replacements.

Ophthalmology was among the hardest hit departments in a recent employee buyout, losing 60 percent of its staff, including several experienced nurses, said Dr. Geoffrey Broocker, the department chief.


Dr. Curtis Lewis, the hospital’s chief medical officer, said in an interview that the quality of care at Grady has “not declined to the point of danger.” But, Dr. Lewis added: “It would be naïve to believe that hospitals that have more resources can’t do more than those that don’t.”


Dr. Lewis and the hospital’s general counsel, Timothy Jefferson, said the hospital had not been sued for malpractice in a case that related directly to inadequate resources. But a review of recent filings found several cases in which staffing appears to have been an issue.

A lawsuit filed by the family of a 23-year-old man who died after suffering a brain injury in a 2004 skateboarding accident claims that for more than 12 hours he was seen only by medical residents — doctors being trained in a specialty — even as his condition worsened. The hospital is close to settling the case.

In 2006, a 27-year-old teacher who survived a fiery car crash nearly died in intensive care after nurses failed to detect and clear a blockage in his breathing tube, another lawsuit alleges. In a deposition provided by the patient’s lawyer, a nurse testified that the intensive care unit for burn victims was short-staffed that day, and that the patient’s nurse, who did not normally work in the unit, was caring for three patients instead of the customary two.

Finding Someone to Pay

Michael B. Russell is a Grady baby — of sorts.

The son and successor of Herman J. Russell, the city’s most prominent black general contractor, he was born in 1965 at the Hughes Spalding Pavilion, which Grady opened across the street in 1952 to serve a growing black middle-class too affluent to qualify for charity care. When integration eroded the demand for such a place, Hughes Spalding evolved, becoming a children’s hospital.

In April, Mr. Russell was called upon to aid his birthplace. He and A. D. Correll, the chairman emeritus of Georgia-Pacific and an éminence grise of the Atlanta business world, were drafted to lead a task force on Grady formed by the Metro Atlanta Chamber of Commerce at the hospital authority’s request.

That one co-chairman was white and one black was a not-so-subtle attempt to bridge the racial divide that has undermined Grady for decades. Grady’s specialties, especially trauma care, are vital to the entire region and draw patients of all races from around the area. But it has long been viewed as a hospital that primarily serves blacks, who comprise 48 percent of the population of Fulton and DeKalb counties.

Only those two central Atlanta counties — and none of their suburban neighbors — make annual appropriations to the hospital’s budget for the care of indigent residents, even though two in 10 Grady inpatients and one in 10 outpatients arrive from other counties, often by ambulance.

Contributions from the two counties, themselves politically and racially divided, have stayed essentially flat for a decade, even as the population and its percentage of uninsured grew. The county commissions in Fulton and DeKalb have been reluctant to increase their contributions when the state has refused to do so, and when suburban counties will not contribute at all.

Only the state can force other counties to pony up money for Grady. And the state legislature and the governor’s office are controlled by white Republicans, whose core constituents have historically not viewed themselves has having a direct stake in the hospital’s future.

In the coming session, however, the legislature, which has long viewed Grady as someone else’s problem, seems moved by the magnitude of the current crisis to consider providing aid, perhaps by financing a statewide trauma network. Grady lost $42 million on charity care for trauma patients alone in 2005, according to the Georgia Hospital Association.

Grady’s ability to plead for public resources has been compromised over the years by its own actions.

There have been charges of corruption and cronyism, most notably in 2005, when a powerful state senator was convicted of using his influence to secure overpriced Grady contracts for his temporary services business.


Handicapped by staff shortages and anachronistic technology, the hospital’s administrative inefficiency is legendary. Over the last three years, one of every five Medicaid reimbursement billings has been kicked back by the state because of filing mistakes, according to the Georgia Department of Human Resources.


When the outpatient oncology clinic studied its 2006 billings, it discovered that the paperwork on one in four patients had vanished before Grady could even file for reimbursement, said Dr. Otis W. Brawley, who left as chief of oncology last summer. Grady’s system for tracking aging equipment is so outdated it is difficult to anticipate needed replacements.

The hospital board has long been reluctant to make money-saving changes that might reduce its traditional mission. Late last year, it rejected the advice of financial consultants and its newly hired chief executive to close an expensive outpatient dialysis clinic for the poor, fearing that many of the clinic’s uninsured patients, including many illegal immigrants, would have nowhere else to go.

But the board has also been politically clumsy, and prone to micromanagement. In May the board’s own consultants concluded that “Grady does not currently have the depth of leadership” necessary to transform the hospital.

The Chamber’s task force trod more gingerly. “Grady’s problems are nobody’s fault,” said its report, released in June. Yet, it insisted, the board must create a new nonprofit corporation to run the hospital, instead of the public authority that has run it up to now. The change would allow Grady to attract philanthropic dollars, expand into money-making services and remove politics from its day-to-day operations, the task force predicted. Mr. Correll promised at least $200 million in private donations if the nonprofit was formed.

The task force’s involvement was in keeping with “the Atlanta way,” the long-standing tradition of bringing together black political power and white business power to address civic problems like segregation and sewer construction. But there was no way to muffle accusations that white business leaders, who see the hospital as vital to the region’s growth, were trying to take over one of the city’s most prominent black-run institutions.

Even after the reorganization was endorsed by Shirley Franklin, Atlanta’s influential black Democratic mayor, black board members who supported it were accused by Grady patients and other local black politicians of being “sell-out Uncle Toms” and worse. They asserted that the move amounted to privatization and would jeopardize Grady’s mission.

When the board hesitated to turn over control to the nonprofit corporation without guarantees of increased financing, Republican state lawmakers threatened to change the hospital’s governance by legislative fiat.

The task force stuck to its guns, insisting the issue was not race but economics. “We stirred the pot, no question about it,” Mr. Russell said. “I hope the old Atlanta way will lead to some degree of progress and we can get Grady on the right footing.”

Finally, in November, the Grady board essentially voted itself out of business, hoping the new nonprofit corporation will begin to overcome the hospital’s political troubles. It agreed to do so, however, only with strings attached, demanding that the state and counties pledge hundreds of millions of dollars to Grady. The conditions surprised and angered many of those who had been most supportive of the deal. Dozens of details have yet to be settled, and it is not yet clear how things will be resolved.

The financial pressure is not likely to subside soon. Grady’s share of federal assistance to charity hospitals has shrunk sharply as the state, which distributes the money, has extended it to more hospitals that serve far fewer indigent patients. At the same time, the Bush administration has enacted a new rule that, unless stopped by Congress, will reduce payments to public hospitals by billions of dollars.

“While so many people are helping,” said Otis L. Story, who was hired in April to be the hospital’s fourth chief executive officer in seven years, “there appear to be opposite pressures pulling us into further financial distress.”

The Last Open Door

Hillary Estrella Reyes is one of the newest Grady babies.

Just three days after she was born in late October, she slept in the lee of her mother’s hospital bed. Tucked into a bassinet with a knit cap and blanket, she was an oblivious example of the explosion in Hispanic growth in Georgia and at Grady. A third of the hospital’s newborns are now children of Hispanic parents.

Grady’s crisis has not touched Hillary’s parents, Patricia and Daniel Reyes, who seemed calm as the nurses wheeled the baby away for a checkup. They paid for prenatal care in $100 installments, and Medicaid will cover the cost of the delivery, because the baby is a citizen.

But her parents are in the country illegally. Without Grady, families like theirs would face an uncertain future in their new city. Where would they go in case of a serious ailment? And what of Hillary, who was born with an unusually rapid heartbeat? If Grady were to close, her options for care might be severely limited.

Grady’s disappearance is a prospect Mr. Reyes, a janitor, and his wife — like many of the hundreds of thousands Grady serves — are unable to visualize. Asked about it, Mr. Reyes could do nothing but shrug.

“I haven’t got sick yet,” he said. “Thank God.”